Recommendation
Reject the proposal of Express. Prepare for the competition of Express by launching aggressive marketing campaign to match the price of Express in short run. Maintain and improve gross margin on BAS sales by leverage the strong relationship with supplier to get the lowest price. Continue improving the value added content, short delivery lead time and inventory management as main values of the company. Aggressively invest R&D to provide an on-line booking and ordering system to further improve customer’s time-to-market, facilitate the BAS sale order; provide the customer “efficient, low price, one-stop-shop” experience that will differentiate A/S from competitors. Focus on VA sales and improve the service, consistently grow sale volume of VA content.
Support
Values of Arrow/Schweber (A/S): Being as the subsidiary of the No.1 distributor of electronic parts company Arrow Electronic, A/S is able to provide customers low price electronic parts and add-value system design solution. A/S also creates demand and provides the inventory buffer for suppliers. The Customer benefits from A/S of low cost parts, technical support and short delivery lead time. And suppliers benefit from A/S of hassle-free sales. Internet trading service Express creates one more level to the existing value chain (Exhibit 1). Express allows A/S to have opportunity to sell product to potential customers. And customers can place order on different distributors. But whether this business model is valuable to the customer especially to small OEM and CM is questionable. Although transactional customers are price sensitive, time to market is also critical to them. They prefer to place entire order within one company to make sure the short delivery lead time. Under this circumstance, jumping into the Express boat is not a wise decision for A/S.
VA Business--Key Business for A/S: Among the overall business of A/S, the VA sales increases from 2% in 1977 to 62% in 1996, and it targets to grow to 80% in 2000. Although the VA gross margin is only 10-15%, it is the key business for A/S to create the demand. For example, one of suppliers, Altera, sells 80% of PLD to its two distributors because value-added programming required by individual customers. Suppliers rely on distributor to generate demand. In return, they offer A/S: Price protection & limited return privileges, warranties not available to others, and control prices by providing discounts. Because of the importance of VA business, it evolved from simple inventory buffer to alter components to meet customer needs by programming or kitting parts, to virtual organization, and to order cycle management.
WestJet is the second-largest carrier in Canada, which mainly focuses on economic airlines. In decades past, WestJet expanded its destination network form all western Canadian cities to international scope. During this development period, IT played a important role. For example, electronic ticket is used in the airline reservation system. However, some IT-related issues also hinders the company’s development.
Mason, K. J. (2001). "Marketing low-cost airline services to business travellers." Journal of Air Transport Management 7(2): 103-109.
Spirit Airlines has long been considered an unorthodox airline. They, of course, address all four P’s in their marketing strategy; however, they focus a large amount of their effort on price and promotion. They focus on cutting price through “unbundling”. They focus on promotion through taking advantage of social issues and breaking news. Many advertisements and deals promoted by Spirit have given the public a definite shock-factor. Spirit has made two objectives very clear: they are furious at getting the customer the lowest fare possible by any means necessary, and they will similarly use any means necessary to get those potential customers to notice those fares. Such a blatant marketing strategy works. Even going up against some big competition, Spirit finds ways to be competitive and successful in flagrant fashion.
A switch from premium overnight services to lower – margin deferred services and ground delivery services is an advantage to Airborne Express. With existing assets including trucks, tracking systems, regional hubs and sorting facilities, they only need minor initial investments to develop fully these kinds of services. They should use these assets wisely and effectively.
In addition to the change in behavior of consumer, many companies or retailers change the sales channel combinations. The greatest impact of the Web-bases electronic revolution has occurred in companies adopting the click-and-mortar approach. Click- and-mortar is one the strategy used by the companies or retailers that they continue to conduct their business in the physical locations and have added the electronic commerce component to their business activities. According to one study, 37% of United States retailers are selling through a combination of the internet, in stores and catalogs. This represents a growing demand for the business-to-customer package delivery service.
The year 1991 witnessed a sharp decline in sales (3.9%). The abundance of suppliers forced competition on the basis of quality, cost and quick delivery. Hence, the already struggling American companies like ACC were wary of the entry of DJC in to the US market.
Spirit Airlines Inc., which is primarily a smaller airline company than its competition, it is still provides the same good(s), (flights) as the other airlines. Since 2007, the company has been able to reduce its “overall ticket prices by 40 percent” (Brooks, Cox, & White, 2012, p. 45). It can be difficult to comprehend how a smaller airline company such as Spirit Airlines, Inc. could be capable
...ontinue to search for modes to decrease the costs and ensure more booking is done online rather than on calls. As can be seen from the analysis above, the weaknesses like press vulnerability breaching from the poor customer services can be strengths and other threats like price sensitivity minimized through opting for traditional methods of air travel.
We are livening in the competitive world, doing business is tough this time. We consumer or customers demand the most satisfactory service. Time is precious, we can’t fix the time we lost. Spending unnecessary time and money for service we wouldn’t get will have a consequence the hurt the service giver who are unable to deliver the excellent services.
1. Strategy in the second half of the 1980s: Having innovative, high-quality products and being a reliable, responsive supplier.
In a time when establishing and maintaining a market advantage is crucial, the use of technical innovations such as the Airline Passenger Reservation Systems (APRS) becomes a competitive necessity. Good business strategies in developing strategic alliances and exposing the consumer to a globally expanded product base allows airlines to compete. A wider range of products, the ability to be flexible with fluctuating consumer needs are all potentially exploitable through the power of technology and strategic planning.
After this decision internet distributors and Express respectively has to be considered as strong competitor due to the price-sensitivity of the electronic industry. Therefore A/S should work on its company image to highlight their advantages compared to discounters. Therefore A/S has to point out that they are aware of being not the cheapest but nevertheless will create more benefit for the customers by offering service and competence.
and is especially popular among eBay customers. Fig.1 briefly illustrates Company’s business. The system enables its
Service is an intangible product involving a deed, performance or effort that cannot be stored or physically processed, were customers directly participate in the production process. Product strategy is therefore very vital for the organization's success. It needs to be developed and manage very careful in order to be successful. British Airways product strategy includes flight services, quality of flights, various destinations across Europe and the world, executive class, business class, speed, security, support facilities and years of experience. It provides the basic product and various alternatives to satisfy all the different customer needs.
The presence of substitutes and low brand loyaty creates substantial buying power in the market. Consumers of air travel today have more knowledge of the market than ever before. The explosion of online ticket site continues to grow and grow. Consumers are able to compare prices of nearly airline on any route. The perfect knowledge of customers today gives them a significant amount of buying power as all airlines are forced to compete on pricing. JetBlue will continue to be faced with many important pricing decisions as the company grows.